Many cable TV companies are already competing with BT and Mercury in providing fixed telephone local services, undercutting BT's prices by about 15 per cent. A spokesman for the CTA said: 'Our residential customers would value having a mobile to go with their fixed line.'
There is room in the radio spectrum for more mobile services following the merger of the personal communications network projects of Mercury and Unitel. The DTI has asked for ideas and is expected to make an announcement soon.
The CTA says that its members are keen to provide mobile telephony in their franchise areas with calls linked nationally through the Mercury- Unitel network. The network is expected to come on stream for the M25 area by the summer and will then be extended to other regions.
The ability to offer mobile telephony could speed up the penetration of cable TV companies in local networks. Investors in the CATV sector include large North American companies. . Analysts at Kleinwort Benson say that within five years revenues from cable telephony could rise to pounds 750m- pounds 1bn and could dent BT's revenues.